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On your author’s obvious tendency to sell too early (from IKN 356)

Here's a short section from Sunday's IKN356. Addressing weaknesses makes for better long-term results.

On your author’s obvious tendency to sell too early

Rather than the normal focus on trades still open, let’s review the six trades that we’ve closed here at The IKN Weekly in 2016. Before the real analysis we need to mention Phoscan Chemicals, which I bought in March 2015 at 28c and sold in January at 26.5c. It needs mentioning in passing because it’s a closed trade in 2016 but it’s not really a good example, as this was a left-over trade from 2015 that was looking for a modest win on M&A activity but when it came (as expected) the management decision was to go for a poor deal (sigh).
With that out the way, let’s get to the real business and the other five closed trade in 2016:

1) True Gold (TGM.v): Bought 18c, sold 25c, pre-commissions profit 38.9%.

This weekend TGM.v is priced at 37.5c. If I’d held onto my shares, the pre-commissions profit would be 108.3%.

2) McEwen Mining (MUX): Bought U$1.09, sold U$1.20, pre-commissions profit 10.1%.

This weekend MUX is priced at U$1.82. If I’d held onto my shares, the pre-commissions profit would be 67.0%.

3) Lake Shore Gold ( Bought C$1.10 (avg over several purchases), sold C$1.69, pre-commissions profit 53.6%.

This weekend LSG is priced at C$1.76. If I’d held onto my shares, the pre-commissions profit would be 60.0%.

4) Atacama Pacific (ATM.v): Bought 19c, sold 40c, pre-commissions profit 110.5%.

This weekend ATM.v is priced at 35c. If I’d held onto my shares, the pre-commissions profit would be 94.4%. However, it was at 45c earlier this week.

5) New Gold (NGD): Bought U$2.06, sold U$2.96, pre-commissions profit 43.7%.

This weekend NGD is priced at U$3.16. If I’d held onto my shares, the pre-commissions profit would be 53.4%. It was as high as U$3.46 this week, too.

In other words, apart from the sale of Atacama Pacific at 40c, as things stand today all my sales in 2015 have either turned out to be too early or way too early. Now context is clearly necessary and to have booked five winners in two short months isn’t to be sniffed at, a win is a win and all that jazz. Also, I have to say that on a personal level I’m not overly annoyed in having left money on the table on those trades. I’m only slightly annoyed in fact; the bad selling of True Gold on the political flare-up in Burkina grates a little because I read the situation badly. Also, I should have given MUX a little more time, but overall it’s the type of thing I personally used to get pissed (with myself) about much more in the past than I do now. I’ve also learned that however difficult it is to ‘buy well’ it’s ten times harder to ‘sell well’ and the compromise of “selling at a profit”, even if it’s far from the best profit that could have been achieved, is one I’m willing to accept. That’s me, hi pleased to meet you. And yes that’s right, I am not you and you are not me but all the same it’s necessary to point out, kind and wonderful people who send me money in exchange for this publication, that in the last couple of months I’ve shown a clear tendency to hit the sell button too early.

I’m not a great trader, never have been and never will be. When I buy at absolute bottoms or sell at absolute tops it’s pure luck, nothing more nor less and my developed attitude isn’t of competition with the next woman or man, it’s a competition against that nebulous entity we know as ‘the market’ and if I can score a win it matters very little if the guy next to me starts on the “huh? Only 50% up on a trade? In this market? Hey, I bought XYZ at 12 and now its 34 and I know it’s going to go to....” etc. I take my wins, I also take my losses, I owe nothing to anybody on either type of result. With that said I do feel a responsibility to those who read The IKN Weekly because you’re kind enough to pay me real money and perhaps U$40 in one month isn’t so much in absolute terms in the great scheme of things, but it’s symbolically very important for me. I won’t play coy with you, I do like it when I hear via feedback that you’ve followed me into trades. The thing that bugs me is if you hit the sell button at the same time as me (and my personal objectives) then feel hard done by as the stock then continues to zoom higher (all the time as I exhort you to hold and add B2Gold which treads water yet another week). So if your decision process if affected by mine, let this section also be an influence on when or whether you sell your trades.

Bottom line: I have a weak spot in my armoury at the moment, I’ve been selling too early. Please take that into account.